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Finance Glossary

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Over 700 finance terms, Shmooped to perfection.

Expense Ratio


The expense ratio of a fund is a fraction that helps you understand how much you're being charged for your investments.

The numerator (top number) is the fee charged to you by the bank or whoever buys investments for you, and the denominator (bottom number) is the total assets or total amount of your investment.

If the numerator is big compared to the denominator, you're being charged a lot for your investments. If that's the case, we hope they're growing like weeds.